Affordable Care Act: State Action Newsletter
April 22, 2011
Legislators Meet with President Obama
On April 15, a bipartisan delegation, including six members of NCSL’s Task Force on Federal Health Reform Implementation, visited the White House and met with President Obama to discuss health reform implementation and other state issues.
“I think we were heard. He’s a former state legislator, which he brought up, so he knows what pressures we’re facing,” said NCSL President Senator Richard Moore (D) of Massachusetts. “He directed his staff to continue to work with us and hammer out solutions that are sensitive to states’ needs.” The group raised several issues related to state implementation concerns and also the Medicaid maintenance of effort requirement and requested flexibility through state waivers.
“It was a great experience and a wonderful opportunity to share the states’ perspective with the president,” said Representative Gregory Wren (R) of Alabama, co-chair of the health reform task force.“We’re facing huge challenges, but I think the president knows that working with governors is one thing, but working with over 7,000 state legislators, where we are in the grass roots all across the country, is going to be the key to success, which is the people’s success.”
The group of legislators also included: Senator Donald Balfour (R-GA), NCSL immediate past president; Assemblyman Herb Conaway (D-NJ) co-chair, NCSL Health Reform Implementation Task Force; Senator Stephen Morris (R-KS), NCSL president elect; Representative Terie Norelli (D-NH); Speaker Rebecca D. Lockhart (R-UT); Representative Rosie Berger (R-WY); Representative Barbara Ballard (D-KS); Representative Joe Hackney (D-NC); and Senator Jeremy Nordquist (NP-NE), Chair, NCSL Health Committee.
States Establish Health Insurance Exchanges
Maryland (SB 182 and HB 166), Virginia (HB 2434) and West Virginia (SB 408) enacted legislation to establish a state-based health insurance exchange.
Maryland’s law establishes the Maryland Health Benefit Exchange as a public corporation and an independent entity of the state. A 13-member board of trustees will be responsible for governing the exchange and will appoint (with approval from the governor) an executive director.
Virginia’s law creates an exchange and requires the governor and the State Corporation Commission's Bureau of Insurance to work with the General Assembly, relevant experts and stakeholders to develop recommendations to present to the 2012 session of the General Assembly regarding the structure and governance of the exchange. The recommendations are due by Oct. 1, 2011.
West Virginia established an exchange within the office of the Insurance Commissioner that will be governed by a 10-member board.
California established its exchange during the 2010 legislative session.
Indiana’s exchange was established by an executive order in January 2011.
At least 26 other states and the District of Columbia have bills pending on exchanges. Washington lawmakers passed SB 5445, which is awaiting the governor’s signature. New Mexico's legislature passed a bill that was vetoed by the governor. Bills to establish an exchange in Georgia, Mississippi and Montana all failed. All 2011state legislation related to federal health reform, including all of the bills mentioned in this article, can be found on the Legislative Tracking Database.
Oklahoma Returns Federal Grant
On April 14, Oklahoma Gov. Mary Fallin announced that the state is returning a $54 million “early innovator” federal grant that was awarded to Oklahoma in February. It is the largest federal grant to be returned by a state to date. Florida, Wisconsin and Louisiana have returned a combined total of $3.6 million in federal grants intended to help states implement elements of the Affordable Care Act. Governor Fallin, backed by Republican legislators, indicated that giving the money back is an important step to stop the implementation of federal health reform in Oklahoma. The state plans to create a health insurance exchange on its own terms. "This is Oklahoma's solution and federalism at work. Our plan [for the exchange] is based on the principles of the free market; it will not limit participation, it will increase competition among private plans and offer consumers the ability to shop for their best option,” said Senate President Pro Tem Brian Bingman. Kansas, Maryland, New York, Oregon, Wisconsin, and a New England multi-state consortium also received early innovator grants.
Inside This Issue
States Crack Down on Medicaid Fraud and Abuse
South Carolina, like many states, is cracking down on Medicaid fraud, abuse and waste. The state has recovered $7.5 million so far in fiscal year 2011. “Data mining,” which uses computer software to scan Medicaid claims for billing irregularities by using algorithms to look for billing patterns, recently helped crack the state's largest case of fraud involving an individual health care provider—$2.3 million.
Many states are ramping up their efforts to prevent and prosecute Medicaid fraud and abuse. For example, this year, Arkansas passed legislation to encourage more whistleblowers to provide information and Georgia is considering legislation to create the Georgia Medical Assistance Fraud Prevention Program. The program will begin with a pilot that includes enrollment, distribution and use of new secure ID cards as well as using data to detect fraud and abuse. Last year, North Carolina implemented measures to strengthen investigation and prosecution of potential abusers including data mining, a campaign to encourage the public and providers to report suspected abuse and a new anti-kickback law. At least 36 states and the District of Columbia have anti-kickback laws.
The Affordable Care Act strengthens the enforcement of anti-fraud and abuse policies and provides new tools and resources as well as an additional $350 million from 2011 to 2020. The law strengthens sentencing for criminal activity, allows suspension of payments based upon pending investigation of credible allegation of fraud, enhances screenings and enrollment requirements, encourages increased sharing of data across governments, expands overpayment recovery efforts and provides for greater oversight of private and public insurance. The Center for Program Integrity at the Centers for Medicare and Medicaid Services focuses on identifying and stopping fraud and acting swiftly to protect beneficiaries in those programs.
If you would like to view recent state enforcement actions, please visit the Office of the Inspector General’s web page.
Selling Health Insurance Across State Lines
Seven states considered legislation in 2011 to allow cross-border health insurance—Arizona, Georgia, Kentucky, New Hampshire, Oklahoma, South Carolina and West Virginia. These bills would allow for the purchase of health insurance across state boundaries or from out-of-state regulated companies. For example, Arizona’s bill would allow out-of-state insurers to sell policies in Arizona without having to cover the state’s two-dozen health insurance mandates. None of these bills require that the coverage be governed by the laws of the state in which the policies are "issued or written." Proponents of this legislation argue that cross-border insurance increases competition between insurance companies and provides additional options for consumers. Opponents believe that offering insurance across state lines will start a “race to the bottom” where consumers will enroll in insurance plans that offer the least coverage at the lowest price, reducing the quality of health plans.
This is not a new issue. At least 16 statesconsidered legislative measures on this topic since 2007. Rhode Islandis the only state with a law, enacted in 2008, to create a regional health insurance compact. Wyoming is the first state, in March 2010, to enact a law based on a free-market model, which focuses on reciprocal agreements to reduce health insurance costs through removal of duplicative regulation, but also includes a multi-state compact related to federal health reform.
The Affordable Care Act permits states to form “health care choice interstate compacts” and also allows insurers to sell health insurance policies in the individual market across state lines. It requires that the insurer comply with in-state standards including unfair trade practice, network adequacy, market conduct reporting, consumer protection, and dispute resolutions applied by the state in which the insurance is sold. The insurer must be licensed in each state, and must notify consumers that it may not be subject to all of the laws and regulations of the state in which it is sold.
Arizona Governor Releases Revised Medicaid Waiver Proposal
Arizona legislators and Governor Jan Brewer continue to work on solutions to shore up the state’s large budget gap. In response to the assured state flexibility by Health and Human Services Secretary Kathleen Sebelius, on March 31, Governor Brewer released a revised a five-year proposal for cutting back the state’s Medicaid program. This new proposal would cut 160,000 low-income childless adults, grandfathering in only existing enrollees, as well as 5,500 people in the “spend-down” category—individuals whose incomes are above the eligibility threshold, but qualify for coverage when their medical bills are taken into account and effectively reduce their income to 40 percent of the federal poverty level. The governor’s new plan mitigates the original plan which called for expiration of the state’s 1115 Demonstration Waiver Program, the Arizona Health Care Cost Containment System (AHCCCS). That plan called for a reduction of about 280,000 beneficiaries from Medicaid, as was reported in the February 9 and 17 edition of this newsletter. This new proposed cut-back to the state’s relatively generous Medicaid eligibility would help close its $1.2 billion budget gap by trimming an estimated $500 million from the Medicaid budget, a proposal agreed upon by both the governor and Legislature. The new proposal also includes eliminating emergency coverage for illegal immigrants and new co-payments for enrollees. The proposal also looks to restore previously cut organ transplant benefits.
Database Tracks Workforce Legislation in the States
With millions of Americans gaining new access to health care services through the Affordable Care Act (ACA) in 2014, the health care workforce will be stretched to its limits to meet this increased demand for services. In response, state legislatures are redefining the parameters—the scope and standards of practice—for several medical professions.
NCSL has compiled a new, comprehensive Scope of Practice Legislation Tracking Database that tracks current legislation in all 50 states dealing with commissions and reports, licensure and credentialing, Medicaid/health insurance plan reimbursement, practice autonomy, prescriptive authority, truth in medical education, and truth in advertising for 22 health care professions. This database contains legislation from 2011, including enacted, pending and failed bills and resolutions. Bills can be searched by state, topic, keyword, status, and/or primary sponsor. It will be updated regularly and is free to all web users